The U.S. Supreme Court on Friday struck down President Joe Biden鈥檚 $400 billion student debt relief plan, holding that it was a 鈥渧ast new program鈥� that exceeded congressional authorization.
In a case being watched by teachers because they tend to be big participants in federal student loan programs, Chief Justice John G. Roberts Jr. said a federal education statute gives U.S. Secretary of Education Miguel Cardona the authority to 鈥渨aive or modify鈥� existing statutory or regulatory provisions applicable to federal student loan programs,鈥� but 鈥渘ot to rewrite that statute from the ground up.鈥�
From the bench, Roberts called the relief plan a 鈥渧ast new program.鈥�
鈥淭he economic and political significance of the secretary鈥檚 action is staggering by any measure,鈥� the chief justice said. 鈥淧ractically every student borrower benefits, regardless of circumstances.鈥�
And the program 鈥渁mounts to nearly one-third of the government鈥檚 $1.7 trillion in annual discretionary spending,鈥� he said. 鈥淭he secretary has just drafted a new law of his own and he has done so without congressional authorization.鈥�
Biden, speaking in the Roosevelt Room of the White House with U.S. Secretary of Education Miguel Cardona at his side, said, 鈥淚 think the court misinterpreted the Constitution.鈥�
But he aimed most of his reaction at 鈥淩epublican state officials鈥� behind the legal challenge to the program.
鈥淚 didn鈥檛 give borrowers false hope,鈥� he said in response to a reporter鈥檚 question. 鈥淭he Republicans snatched away the hope that was given.鈥�
The president announced a 鈥渘ew path鈥� to student loan relief that would be based on the Higher Education Act rather than the HEROES Act. It will include temporary, 12-month relief that would remove the threat of default even if a borrower missed payments. Details on the new program were not immediately available.
鈥淚t鈥檚 going to take longer, but we鈥檙e getting on it right away,鈥� Biden said.
In a statement, Cardona said the Education Department 鈥渋s providing a 12-month on-ramp transition period that will help ensure borrowers smoothly and successfully return to repayment without falling into delinquency or default.鈥�
Cardona said that this transition period 鈥渨ill help borrowers avoid the harshest consequences of missed, partial, or late payments like negative credit reports and having loans referred to collection agencies.鈥�
鈥淲e鈥檙e going to fight, and we鈥檙e going to keep fighting,鈥� he added. 鈥淲e鈥檙e going to put the best legal arguments forward to stand up for borrowers.鈥�
The majority opinion in was joined by Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch, Brett M. Kavanaugh, and Amy Coney Barrett.
From the bench, Justice Elena Kagan read from her dissent, which was joined by Justices Sonia Sotomayor and Ketanji Brown Jackson.
She criticized the majority for straining to find that the states challenging the program had legal standing, and she said the HEROES Act clearly gave the secretary the authority for the program.
鈥淭he result here is that the court substitutes itself for Congress and the Executive Branch in making national policy about student-loan forgiveness,鈥� Kagan said.
鈥淐ongress authorized the forgiveness plan (among many other actions); the secretary put it in place; and the president would have been accountable for its success or failure,鈥� she added. 鈥淏ut this court today decides that some 40 million Americans will not receive the benefits the plan provides.鈥�
Teachers鈥� unions filed briefs supporting the Biden plan
The court dismissed the other case it heard regarding the plan, , ruling unanimously that individual challengers had not shown any harm that would give them legal standing. Alito wrote a in that case.
Both cases involved the Biden administration鈥檚 $400 billion student loan debt relief plan, a major test of executive branch power watched by millions of teachers carrying high student debt, many of whom would鈥檝e qualified for relief under the program.
The two national teachers鈥� unions each filed friend-of-the-court briefs supporting the Biden administration.
鈥淣early half of educators have outstanding student loan debt, owing, on average, $58,700,鈥� the National Education Association . 鈥淭he financial challenges faced by these educators compared to their peers accelerated during the pandemic, but debt relief now would place many educators on more solid financial footing.鈥�
The American Federation of Teachers that outstanding student loan balances, coupled with the lingering effects of the pandemic, have made it difficult for school districts to retain teachers.
鈥淪tudent debt relief will help remediate the crushing impact of COVID-19 on teachers, who must amass substantial debt to enter their profession and who often work at low wages,鈥� the AFT brief said.
When the COVID-19 pandemic hit in early 2020, President Donald Trump鈥檚 then-secretary of education, Betsy DeVos, invoked the HEROES Act to pause repayment obligations and interest accrual on all Education Department-held loans. The statute gives the secretary such power to act under a 鈥渘ational emergency,鈥� such as a terrorist act, a war, or a pandemic.
Current Secretary of Education Cardona determined last year that the across-the-board pause should end, but that repayment obligations for lower-income borrowers would put them at risk of default. (The recent debt-ceiling bill agreed to by Congress and Biden blocks any further extension of the payment pause.)
The Biden plan issued up to $10,000 in student-loan relief to eligible borrowers with a federal adjusted gross income below $125,000, or $250,000 for borrowers filing jointly. Recipients of the federal Pell Grant could receive up to $20,000 in relief because they were considered to have fewer resources and be at substantially greater risk of default.
The debt relief plan was immediately challenged in multiple lawsuits, with two coming before the Supreme Court for arguments in February.
Six states鈥擜rkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina鈥攃laimed the program violated the executive branch鈥檚 authority. They lost on standing grounds in a federal district court. But the U.S. Court of Appeals for the 8th Circuit, in St. Louis, reinstated the case on the theory that a Missouri state loan-servicing agency would lose revenue if many of its accounts were wiped out by the debt-relief plan, and thus Missouri would suffer the kind of concrete injury necessary to provide it with legal standing.
The 8th Circuit court also upheld a nationwide injunction blocking the program, although it did not specifically rule on the merits of the program. That case in the high court was Biden v. Nebraska.
The second case involved two Texas individuals, one who did not qualify for any relief and the other who qualified only for the first $10,000. A federal district court held that the program was substantively unlawful, and it also blocked the program nationwide. The U.S. Court of Appeals for the 5th Circuit, in New Orleans, declined to delay the district court ruling. The administration appealed those rulings in Department of Education v. Brown.
Five former Republican U.S. secretaries of education filed a in support of the challenges to the plan, which they called 鈥渦nprecedented.鈥�
鈥淣ever before has a president even suggested that the Executive Branch has the authority to cancel federal student loan debt on this scale,鈥� said the brief signed by DeVos (who attended the arguments) and four of her GOP predecessors: Margaret Spellings and Roderick Paige (President George W. Bush), Lamar Alexander (President George H.W. Bush), and William J. Bennett (President Ronald Reagan).
鈥淣one of the secretaries believes that Congress provided clear authorization to the Executive Branch to ignore the [Education] Department鈥檚 obligations to collect student debt by canceling it,鈥� the brief added.
